Bounce Planet, Recreation Unlimited, any gymnastics place (try A+ Gymnastics), Chuck E Cheese, Children's Museum, McDonald's, Ben & Ari's, Pinheads, Monon Center (party rooms are next to the indoor water park).
My advice is to just have it at home. Save money when they are that young and they won't really remember it. When they are that young, they'll have just as much fun at home with friends and you don't really need to go all-out. All our birthday parties so far have been at home and the kids love them. In fact, many of their friends are talking about the parties long afterwards and say they are better than non-home ones they've been to.